noise ratio high .” musk displays B u s i n e s s F i n a n c e

noise ratio high .” musk displays B u s i n e s s F i n a n c e

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1-8d Leadership Case Problem A

Elon Musk, Business Leader and Superhero

While still in his early forties, Elon Musk had established himself as one of the world’s best known entrepreneurs and corporate leaders. His rise to fame began in 1999 when he founded, an online payment company that eventually became PayPal, and was later sold to eBay for $1.5 billion in stock. In a few years, Musk invested this large amount of money into three start-up companies.

Musk wanted to start a low-cost Mars mission that would capture the imagination of thousands of people about space travel. To make life interplanetary, Musk reasoned that a transport system was needed that would be completely and rapidly reusable. To meet this need, in 2002, he founded Space Exploration Technologies (or SpaceX). In 2012, the Dragon spacecraft of SpaceX delivered 500 pounds of provisions and equipment to the International Space Station. Dragon returned nine days later, landed in the Pacific Ocean precisely on target two minutes ahead of schedule and in excellent condition.

In his quest to help Earth become less dependent on carbon-generating fuels, he cofounded Tesla, the electric car company and SolarCity that manufacture and markets solar-energy systems. Tesla automobiles are sold directly to consumers, often through two dozen stores of galleries in the United States. Traditional dealers dislike this direct approach to sales because they say it violates state franchise laws.

Musk was raised in South Africa and Canada before coming to the United States to complete his college education. He holds undergraduate degrees in physics and business from the University of Pennsylvania. Musk acquired his expertise in aerospace engineering on his own, including being guided by textbooks on subjects such as fundamentals of liquid propellants as well as propulsion elements. Musk has also carefully studied the biography of Albert Einstein.

Musk is a strong believer in simplicity in technical design, manufacturing, and in running an organization. Tim Mueller, the director of propulsion systems at SpaceX, says that the bureaucracy is much simpler in his company than in an organization such as NASA that has to satisfy so many constituents. He says, “If you want to change something or fix something, just talk to Elon. It keeps the signal-to-noise ratio high.”

Musk displays a strong belief in his own capabilities and creativity, seen as a sign of hubris by some observers. He believes that he has a design that will allow for the colonization of Mars. Musk has filed for almost no patents because he believes that he is so strongly ahead of the field that nobody else could copy his technology. Musk’s reasoning is that if you move fast enough, nobody can catch you.

Several people who worked for Musk in the past describe him as autocratic and blunt, often to the point of being offensive. Steve Jurveson, a SpaceX board member said about Musk, “Like Steve Jobs, Elton does not tolerate C or D players. But I’d say he’s nicer than Jobs and a bit more refined than Bill Gates.” In 2013, when three battery-related fires erupted in Tesla cars, Musk responded combatively to critics via his blog. He pointed out that gasoline fires were a greater potential danger than battery fires in an electric vehicle.

Musk is such a fanatic about design that he devotes hours to personally inspecting every Tesla car. He will notice a headlamp misaligned by a few millimeters. He once said that the wrong type of screw in a sun visor, “feels like daggers in my eyes.”

Jon Farveau, a friend of Musk, and the director of Iron Man movies claims that Musk is the basis for his version of comic book hero Tony Stark, the playboy who invents a flying suit with built-in weapons.


  1. Which roles does Musk appear to occupy as a leader of his companies?
  2. What would you perceive to be a key advantage and a key disadvantage of reporting directly to Musk?
  3. What is your overall evaluation of Elon Musk as both a business leader and a leader in society?
  4. What factors might have Musk, similar to the late Steve Jobs, going for him as a leader that people will put up with his blunt approach to people?

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